Saturday, January 24, 2015

Vladimir Suchan: Logos politikos: The low prices of oil could be drying out the extraneous feeding of the US dollar through the petrodollar

This article by Taylor Durden has spotted an important change and trend, apparently thus marking an end of 40-some-year-long era. While the US economy can live in principle very well with low cheap prices of oil, low oil prices might be deadly for the overall US hegemonic system of fiat money, which, after 1971, was based on the so-called petrodollar, that is to say, 1) on recycling of the dollars for oil by the US oil producing allies into US bonds (and depositing them in US banks) and 2) on creating US- and IMF-controlled US-dollars-based debts of oil importing countries.

The age of the disposable petrodollars for financing the US debt and bonds has now come to an end because the surplus of the petrodollars has dried out. Creation of US-dollar new debts for both the oil importing and oil exporting countries (including Russia) might be one possible, though very partial solution of sorts. The other possible solution is even more obvious--by creating chaos and war abroad making investments in the US debt and bonds appear comparatively the most "secure investment." In this case, the continuation of the system would become a much less concealed form of world racket. On top of it, the chronic and high unemployment is already a tell-tale sign of the high degree of disinvestment in the "real economy" and counter-productive depression of the earning power of the many.

The other "solution" clearly aimed at by the Empire's Drang nach Osten--against Russia--is to save itself by taking over Russia's vast natural resources and real estate. In this regard, I consider it a safe bet to bet that a good portion of Russian oligarchs are inclined to participate by sharing in the intended spoils ("securing their private property") and promised immunity and the Empire's good will and special treatment.

The system, as always, stands in front of its renewed fatal question of how to create more debt, whether public or personal, when the level of tolerance for further indebtedness is running into the greatly heightened risk of default and resistance, respectively, into plummeting tolerance of society to cope with the high burden of debt without crushing and falling apart?

As a result, the system is now turning more and more on the same "middle class" which is supposed to be the supporting pillar of the system. When wealth can no longer be extracted from others abroad as before, the system is forced to start cutting the branch on which it has been sitting. For squeezing the 1 or 0.1% is the very last idea to be tried by the system--only after all the others, which could include an option of the Last Judgment itself, are tried and fail.

By the way, democracy in Athens started in earnest with Solon's reforms, a key part of which was writing off personal debts and buying out citizens who fell into slavery due to their debts.

How this works. Follow one of the links. Should you decide to buy that item, or any item, I get a small percentage, which helps to maintain this site. Your cost is the same, whether you buy from my link or not. But if the item remains in the cart too long, I don't get a thing.

RT - News

Disclaimer:

The views and/or opinions posted on all the blog posts and in the comment sections are of their respective authors, not necessarily those of No Bread and Circuses For You.

FAIR USE STATEMENT

This site may contain copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in an effort to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. we believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law.

In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml

We only post a portion of the article here. We encourage you to click the link at the bottom of each post to read the full story.

If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.